APPEAL FROM THE DISTRICT COURT OF THE UNITED
STATES FOR THE DISTRICT OF DELAWARE.

Argued April 29-30, 1948 -- Decided June 7,
1948

The United States brought a suit under § 4 of
the Sherman Act to enjoin, as a violation of §§ 1 and 2 of the
Act, the acquisition of the Consolidated Steel Corporation by the
United States Steel Corporation. After a hearing on the merits,
the District Court denied the relief prayed in the complaint. 74
F.Supp. 671. A direct appeal was taken to this Court under the
Expediting Act. Affirmed, p. 534.

1. The United States sued under § 4 of the Sherman Act to
enjoin the acquisition by United States Steel Corporation of the
assets of Consolidated Steel Corporation, largest independent
steel fabricator on the West Coast, as a violation of §§ 1 and
2 of the Act. The gist of the complaint was (1) that the
acquisition would be in restraint of trade, because all
manufacturers other than United States Steel would be excluded
from the business of supplying Consolidated's requirements of
rolled steel products, and because existing competition between
Consolidated and United States Steel in the sale of structural
fabricated products and pipe would be eliminated; and (2) that
the proposed acquisition, in the light of previous acquisitions
by United States Steel, was an attempt to monopolize the
production and sale of fabricated steel products in the
Consolidated market area. Held:

The proposed acquisition would not violate § 1 or § 2 of the
Sherman Act. Pp. 507-508, 519-534.

(a) The acquisition does not unreasonably restrict the
opportunities of competitor producers of rolled steel to market
their product. Pp. 519-527.

(c) It is not proved in this case that the elimination of
competition between Consolidated and the structural fabricating
subsidiaries of United States Steel constitutes an unreasonable
restraint of trade. P. 529.

(d) The elimination of competition between Consolidated and
National Tube (a United States Steel subsidiary) does not
constitute an unreasonable restraint of trade in pipe, in view
inter alia of the limited extent of the competition between them
in this field. Pp. 530-531.

(e) In the light of previous acquisitions by United States
Steel, including that of the government-owned plant at Geneva,
Utah, the acquisition of Consolidated does not demonstrate the
existence of a specific intent to monopolize, but reflects rather
a normal business purpose. Pp. 531-533.

(f) Considering the various objections in the aggregate and in
the light of the charge of intent to monopolize, the acquisition
does not violate the public policy manifested in the Sherman Act.
Pp. 533-534.

2. The Sherman Act is not limited to eliminating restraints
whose effects are nation-wide; but, where the relevant
competitive market covers a lesser area, the Act may be invoked
to prevent unreasonable restraints in that area. P. 519.

3. Withdrawal of Consolidated as a consumer of rolled steel
products made by other producers does not constitute an
unreasonable restraint. Pp. 520-523.

5. There is no declared public policy which forbids, per se,
an expansion of facilities of an existing company to meet the
needs of new markets of a community, whether that community is
nation-wide or smaller in area. P. 526.

6. The same tests which measure the legality of vertical
integration by acquisition are applicable to the acquisition of
competitors in identical or similar lines of merchandise. It is
first necessary to delimit the market in which the concerns
compete and then determine the extent to which the concerns are
in competition in that market. If such acquisition results in or
is aimed at unreasonable restraint, then the purchase is
forbidden by the Sherman Act. P. 527.

7. In determining what constitutes unreasonable restraint,
dollar volume in itself is not of compelling significance.
Consideration must also be given to the percentage of business
controlled, the strength of the remaining competition, whether
the action springs from business requirements or purpose to
monopolize, the probable development of the industry, consumer
demands, and other characteristics of the market. The relative
effect of percentage command of a market varies with the setting
in which that factor is placed. Pp. 527-528.

8. Even though a restraint of trade be reasonable and not
unlawful under § 1 of the Sherman Act, it may nevertheless
constitute an attempt to monopolize in violation of § 2 if a
specific intent to monopolize be shown. Pp. 531-532.